If a company loses $80 billion plus in five years and then asks for government help, you shouldn't be surprised if the government tells the CEO to take a hike. The market is un-nerved today because of the increased government involvement in GM but maybe more so by Geithner's comment that there will be more banks needing money before this is done. This seems to go against the banks saying they want to/will be able to pay back TARP when the stress tests are over. It seemed last week that the banks were poking their heads up a bit and this statement makes us all wonder.
Also, Obama and the G20 is not likely to be a love fest. A weakened king (America) emboldens the pretenders to the throne to push for concessions. If nothing else, leaning against the big guy plays well in the home town press. Snarls and tight lipped grins will be the order of the day in London.
The rally we had got overextended and today's action could simply be the normal corrective process of any upturn. The fact there are some news items to spur it along could well be incidental. The July lows on the S&P at 740-750 (we are at 780 now as I write this) is the likely testing zone. As I have been saying for months, a bottom is a process and it takes a year and multiple tests of the lows to find out if the low is indeed a bottom.
With lots of news this week (besides the G20 meeting, we have the Case Shiller housing report and the unemployment number on Friday ) expect the market to be more nervous than not.
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